Market Equilibrium Process Paper

ECO/561 Economics:   Assignment Week 1:   Market Equilibrium Process Paper

Fatorma Bolley
Course:   ECO/561 Economics
May 13, 2010


Market Equilibrating Process Paper
            This paper discusses market equilibrating process in relation to life experience.   Equilibrium price, equilibrium quantity, surplus, shortage and changes in supply and demand and how these changes impact equilibrium are also discussed.   A market in my personal opinion is a place where people buy and sell goods and services, and it could be under a roof or virtual. According the Adams Complete Investment & Finance dictionary, market is a specific location where securities are traded. ”The vast network-voice and data-of securities dealers, brokers, traders, investors and speculators who are actively trading with each other,( Adam Dictionary, 2009). McConnell et all, started market bring together buyers (demanders and sellers (suppliers) and they exist in many forms, (McConnell, Brue, & Flynn, 2009).
What Is Equilibrium?
          Equilibrium is the state of balance between demand and supply.   McConnell et all explained, equilibrium price (or market clearing price) is the price where the intentions of the buyer and seller match. “It is the price where quantity demanded equal quantity supplied” (McConnell, Brue, & Flynn 2009 p.54). When market is in equilibrium there is neither a shortage nor a surplus.   Surplus is excess supply and shortage is when quantity demanded exceeds quantity supplied.   The equilibrium price is the price where quantity demanded equals quantity supplied. In turn, equilibrium quantity is the quantity demanded and quantity supplied at the equilibrium price in a competitive market, ( UOP, 2009).
Factors That Influence Equilibrium
          In an effort to relate this paper to personal experience, I will consider my gasoline consumption patterns. Many factors can influence...